Majority of U.S. Consumers Believe Country is in Recession
Schaumburg, Ill. Eighty-five percent of U.S. consumers believe the country is currently in a recession and consumer confidence in the economy plunged 17 points from the second half of 2007 to the first half of 2008, according to a new online survey by The Nielsen Co.
About 35% of U.S. consumers consider the economy their biggest concern over the next six months. Debt comes in a distant second place at 15%, followed by work/life balance (8%). International affairs, such as war and terrorism, rank near the bottom of the list (2% and 3%, respectively). Immigration is cited by only 2% of respondents.
“With high gas prices, food inflation and other economic pressures, it’s not a surprise that the economy is a top concern for many Americans,” said David Parma, global head of customized research for The Nielsen Co. “Consumers have many reasons to feel pessimistic right now and even if we’re not officially in a recession, consumers certainly feel like we’re in one.”
Overall, the report indicated that the American view of the economy is bleak. Sixty-six percent of U.S. respondents showed a pessimistic view of their local job prospects over the next 12 months, with 50% saying it’s “not so good” and 16% calling it “bad.” Only 3% called it “excellent.”
Costco 3Q sales up 13%
ISSAQUAH, Wash. Costco Wholesale reported that net sales for the third quarter of fiscal 2008 increased 13% to $16.26 billion, from $14.34 billion during the third quarter of fiscal 2007.
The company reported that U.S. comparable-store sales for the quarter increased 6%. This increase reflects the recent rise in gas prices. Excluding this, Costco said U.S. comps would have increased 4%.
Net income for the third quarter of fiscal 2008 was $295.1 million, or 67 cents per diluted share, compared to $224 million, or 49 cents per diluted share, during the third quarter of fiscal 2007.
Sears Holdings posts 1Q loss
HOFFMAN ESTATES, Ill. Sears Holdings reported a net loss of $56 million, or 43 cents loss per diluted share, for the first quarter ended May 3, compared with net income of $223 million, or $1.45 per diluted share, for the first quarter ended May 5, 2007.
For the quarter, Sears Domestic’s comparable-store sales declined 9.8% while Kmart’s comparable-store sales declined 7.1%. Total domestic comparable-store sales declined 8.6%. Sears contributed the comps decline to increased competition and weakness in the general economy and housing market, as well as the impact on its customers of the increased costs of consumer staples such as food and gas.
“Our first quarter results reflect the difficult economic environment and intense competition for consumer business. That said, since May 3, 2008, our sales declines have moderated somewhat,” said Bruce Johnson, Sears Holdings’ interim ceo and president. “As a result of actions we have taken and will continue to take to manage our costs, our current forecast for 2008 reflects higher EBITDA than we achieved last year. At the same time we are managing costs, we will continue to invest in our future by hiring talented leaders and improving our online and multi-channel capabilities.”